Affiliate Marketing: An Ultimate Guide for 2021, Part 2
Getting started with an affiliate marketing program
Affiliate marketing can appear to be a straightforward digital marketing method – a brand or advertiser defines the desired action they’re looking for and then pays when that action has been completed. However, it can be a challenge to actually launch and operate a successful affiliate marketing program.
This guide outlines the must-know elements for getting started with an affiliate marketing program, including how to set commissions, find and manage the right partners, plus continuously analyze and leverage real-time data to maximize your profit.
Getting started with an affiliate marketing program is part of our blog series on the fundamentals of affiliate marketing.
How to set an affiliate commission
A common inquiry people have when looking to start an affiliate marketing program is about how to set an affiliate commission. Commissions encourage affiliates to assist in the sale of your products. Choosing the best commission structure for your campaigns is vital to affiliate marketing success.
Because each vertical or type of product and service has its own pattern of commission rates, it’s important for you to analyze your competitors’ affiliate programs to remain competitive. Resources such as Offervault and oDigger are helpful for collecting information about existing affiliate offers.
Here are the widely used payment methods to consider – depending on your unique business goals.
- Pay-for-performance methods
- Flat rate per action (CPA): Of all the payment models, this is the most popular. The fee is paid to the affiliate once they refer a prospective customer to perform the desired action.
- Shopping cart percentage (RevShare): This approach shares a predefined percentage of the qualified referral’s total shopping cart with the affiliate.
- Pay-for-volume method
- Cost per click (CPC): This model means affiliates get rewarded for each click they receive on their link. When looking to increase website traffic or drive individuals to a landing page, this is a great option.
- Fixed: With this method, a publisher receives a set price. Fixed commission rates are often driven by the publisher as they offer traffic options such as display ad space.
- Cost per 1k impressions (CPM): A CPM model pays the publisher per thousand impressions. This is great for launching an awareness campaign, as long as you track the quality of traffic.
If you’re managing a large volume of affiliates and campaigns, consider an affiliate marketing software with these three commission management features to help you keep up with changing commissions.
How to find affiliates
The partners you associate with directly impact your reputation and credibility. So, an early decision you’ll have to make is how to find affiliates, and how to ensure they are the right fit. The three main avenues include:
- In-house: Find and manage affiliates yourself, and develop direct relationships.
- Outsource: Partner with an outsourced affiliate network and management service for fast and easy setup.
- Hybrid: Implement a hybrid approach by leveraging both approaches. For instance, you can use a third-party service for identifying and managing a larger volume of affiliate partners, while handling an in-house program to cultivate one-on-one relationships with top-performing affiliates.
Additionally, when growing your existing affiliate base, identify what’s working well and then either look for more of the same or begin diversifying your affiliate base. Recruiting tools such as Publisher Discovery provide deep insight into each vertical, providing advertisers and networks with insights about the most relevant and influential potential partners.
With so many players in the ecosystem that can affect a brand, you need to monitor all affiliate marketing activity to identify the right partnerships and then effectively and efficiently manage them.
How to stop affiliate fraud
Affiliate fraud occurs when an affiliate steals credit for a conversion that wasn’t actually achieved by them in order to collect unearned commission. In this situation, the network or advertiser pays for a conversion that was organic or created by someone else.
To build an effective fraud management process that stops potential affiliate fraud and low-quality traffic, marketers must analyze data about their clicks and conversions. When doing so, they may identify potential red flags such as:
- Conversion rates for certain affiliates are unusually high.
- Click counts are high, but the volume of conversions is low.
- Referring URLs are all coming from the same location.
- Traffic is originating from a previously banned site.
Technology is key for receiving and leveraging data. Advertisers and networks can identify revenue-impacting affiliate fraud in real-time when they receive custom alerts for suspicious behavior and are able to set up traffic controls to create rules for blocking or redirecting traffic at the campaign level.
How to manage affiliates/affiliate management
Once you have acquired the right affiliates, the entire process of your program depends greatly upon an additional factor – and that is affiliate management. Successful affiliate management enables you to make effective, efficient, and intelligent business decisions while ultimately increasing the value of your program.
Here are tips to consider during affiliate management:
- Properly target customers by gathering and monitoring your program data in real-time
- Leverage attribution data to understand your marketing spend.
- Implement a feedback loop to evaluate affiliate performance.
- Ensure sales are valid with a proper fraud management system.
Insight into data at every step of the purchase funnel enables you to efficiently and effectively evaluate each affiliate and to reach your targeted audiences.
How to choose the right affiliate marketing software
As mentioned, you’ll need to monitor your affiliate program’s progress on a regular basis. This is accomplished through your affiliate program software. The right technology solution brings clarity about the performance of your marketing campaigns, enabling you to accurately manage and measure partner performance.
Review the following action items to ensure you choose the best affiliate marketing software for your needs:
- Pinpoint and prioritize business goals for your affiliate software solution.
- Determine which product features and benefits deliver the capabilities that meet your needs.
- Make a side-by-side product comparison of different providers to select the best solution to drive your business forward.
Purchasing affiliate marketing software is a big decision. Use trusted resources like this step-by-step affiliate marketing software checklist to ensure you choose a solution that will provide you with everything you need to run a high-performing affiliate marketing program.
For additional resources, check out the following:
- 6 Signs to Know if You’re Using the Right Affiliate Network Software to Fuel Growth
- Build vs Buy Software: Dispelling 3 Common Myths About Building Your Own Affiliate Network Solution.
- Affiliate Marketing: An Ultimate Guide for 2021, Part 1